Report: FAST Revenues to Reach $13 Billion by 2028, but Movie Theaters Will Earn Nearly Five Times as Much
Report: FAST Revenues to Reach $13 Billion by 2028, but Movie Theaters Will Earn Nearly Five Times as Much
The American appetite for free ad-supported TV (FAST) is large, but its market might already be saturated. There are more than 1,500 free streaming channels available in the United States, and platforms that offer FAST platforms like Pluto TV, Tubi, Xumo Play, the Roku Channel, and many others are now competing for the same pool of users.
The technology and media research firm Omdia recently dove into the FAST market. As reported by Advanced Television, Omdia’s senior research director Maria Rua Aguete forecasts that FAST revenues will reach $13 billion by 2028. Much of this will come from the U.S., but the biggest opportunities for growth and expansion will be in international markets where FAST has not gained much of a foothold thus far.
The real good news in Omdia’s forecasts is for movie theater owners. Theaters have been struggling since the COVID-19 pandemic, and have still not climbed back to pre-pandemic revenue levels; one survey from February found that theaters were making just 64% of the money they pulled in prior to 2020. But Omdia forecasts that cinemas will generate close to $50 billion in revenue by 2028, almost four times what FAST channels are expected to bring in collectively.
That would be a big help to chains like AMC, which are struggling to remain afloat. On Thursday, AMC recently reached a distribution deal with the free streaming platform Mansa to distribute its original films, showing how FAST content and movie theaters can work together to lift the fortunes of both. But there is blood in the water, and the sharks are circling; Amazon reportedly expressed some interest in purchasing assets from AMC if the company can’t right its financial ship soon.
This predicted rebound in theatrical revenues will be owed in large part to studios. Producers like Disney and Warner Bros. Discovery have committed to keeping movies in theaters for longer before sending them to streaming platforms, which brings larger profits for theater operators and movie studios alike.
Aguete also stated that FAST providers would have to work more closely with social media sites like TikTok in the future. Younger viewers are more likely to use social media to get their video content than they are to watch a streaming service, and FAST channel operators will have to make peace with this fact if they want to ensure healthy revenue growth.
“The FAST business is small outside the U.S.,” Aguete said. “Broadcasters have to be aware and have to adapt to the digital world, they have to put content to attract young audiences and generate agreements with social networks and with TikTok … whether they want to or not. Right now it’s not very clear who is the friend and who is the enemy, and really those who are doing interesting things are those who are showing open-to-partnership and not those who are still wondering who is winning the Streaming Wars.”
FAST channels are certainly here to stay, but just like the subscription video services that came before them, they have some evolving to do. Owners of these channels can expect impressive growth in the coming years, but they’ll have to cozy up to social media platforms to keep Gen Z interested. Even if they do this, FAST revenues won’t climb anywhere close to the amount that theaters should bring in by 2028.
Tubi
Tubi is a free video streaming service that includes on-demand access to 200,000+ movies and TV episodes - more than any other streaming service. Its ad breaks are shorter and less frequent than most free services. Fox executives have called their service “TV on steroids.”